STRATEGIES FOR GROWTH Session 2

The entrepreneurial process Opportunity Entrepreneur Organisation Resources Leadership and direction Attraction and Management Identification Key Contingencies Wickham, P. (2006: 224)

Organisation May take many forms Often characterised by strong, charismatic leadership Less formal, therefore flexible and responsive Networks of contacts rather than formal structures they work informally, in a competitive way and succeed by adding value. Wickham, P. (2006: )

Resources Money, people, effort, resources and skills. Physical resources, whatever machinery, buildings, equipment the organisation has Intangible assets, such as the name/brand of the company, intellectual property, goodwill As organisations grow, the entrepreneur might find it difficult to maintain control Wickham, P. (2006: )

Opportunity A gap left in the market by those who currently serve it. This represents an opportunity to server the market with something different and/or better than the present suppliers. Need to add value through innovation and profitability. Wickham, P. (2006: )

Opportunity A gap left in the market by those who currently serve it. This represents an opportunity to server the market with something different and/or better than the present suppliers. Need to add value through innovation and profitability. Wickham, P. (2006: )

The learning organisation Opportunity Entrepreneur Organisation Resources Configuration Focus Fit Wickham, P. (2006: 227)

Innovation If the opportunity is the chance to do something differently, the innovation is the way of doing something different or better. Innovation is the key to exploiting an opportunity. Wickham, P. (2006: 236)

The function of the Entrepreneur The role of the entrepreneur is largely an economic one. They recognise and fill gaps in the marketplace and use this opportunity to make profit. Government recognise the role of the SME and the entrepreneur as a mechanism to stimulate growth and change in an economy and are increasingly finding ways to help and support them. Wickham, P. (2006: 5-12)

The function of the entrepreneur Provide market efficiency – again in economic terms the entrepreneur stimulates efficiency and optimization of resources by creating competition. This may be through market pressure (price), innovation or both. Accept risk – not everyone is comfortable with taking risks in business and entrepreneurs take risk with a view to the anticipated rewards. While in economic terms risks may simply be financial, there are the personal risks for the entrepreneur – self esteem, professional standing. The entrepreneur may not be the investor. Wickham, P. (2006: 5-12)

The function of the entrepreneur Maximize investor returns – investors look for entrepreneurs who have a record of creating profitable ventures. The financial risk lies primarily with the investor, who may be will to balance the financial gains with other stakeholder interests, or who may not. Process market information – Entrepreneurs are constantly looking for opportunities to exploit and gaps in the marketplace – where for products or services. In this respect they act as a catalyst and agitate the market. Wickham, P. (2006: 5-12)

Risk of Failure An individuals propensity for risk will determine the type of entrepreneur they are. Risk to the entrepreneur may be viewed in many different ways: personal wealth, reputation, self esteem. The role of the entrepreneur is to manage risk, as far as it is possible to do so, given that: –You can not truly predict the actions of the market or competitors –You may need to choose between a set of competing options and will act on you anticipated ‘view of the world’ and on the anticipated actions of others. – The payoffs anticipated my not happen as predicted, contingencies need to be in place. Wickham, P. (2006: 247)

Certainty to Ignorance Certainty Ambiguity UncertaintyRisk Ignorance

Certainty, Risk and Uncertainty Certainty – a firm knowledge that something will happen. Risk – there is a probability that events or actions will occur. Even if the probability of a positive outcome are good, risk is still present. Risk may be gambling on a positive outcome. Uncertainty – when the level of certainly is not know, actions and decisions can be made to maximize potential or minimize loss. Business decisions are made in conditions of uncertainty, with the aim of minimizing risk. Wickham, P. (2006: 248)

Ambiguity, ignorance Ambiguity – this lies between risk and uncertainty. There is no probability that a situation might happen, but there is no compete uncertainty either. The entrepreneur may have a instinct or expectation based on market knowledge. Ignorance – the opposite of certainty. No understanding of the issues or probabilities. A high risk strategy. Wickham, P. (2006: 248)